Prior to the launch of ZCash, the majority of the cryptocurrency community seemed positive that Monero would lose its title of “the leading privacy and anonymity-focused cryptocurrency” against the overhyped and highly anticipated ZCash. Roughly two weeks after the debut of ZCash, it is becoming more evident that Monero still remains as the heavy community and market favorite.
Amid its debut, ZCash received significant mainstream media coverage and support from the bitcoin industry’s prominent investors including Pantera Capital, Digital Currency Group, Roger Ver and Ryan Smith, primarily for being the first official cryptocurrency to utilize zk-SNARK, a zero-knowledge proof construction that anonymizes or hides the amount of transactions and parties involved in the network.
IEEE Spectrum, NY Times and the FT, amongst many other media outlets, hyped the debut of ZCash, stating that it will become the first “truly anonymous blockchain-based currency.”
Despite the anticipation going into the launch of ZCash, denoted ZEC, its overvalued market cap began to decline rapidly, plummeting from its initial price of $16,000 to $200 within days.
For the most part, the rapid devaluation of ZCash was caused by a series of controversial discussions within the cryptocurrency community, investors, traders and developers in regards to the “trusted setup” launch of ZCash, which Bitcoin lead developer and renowned cryptographer Greg Maxwell warned users against in 2014.
Maxwell stated, “Bitcoin emerged at a surprisingly mature state, the BCN/MRO/FTM stuff isn’t yet anywhere near as mature. But certainly darkcoin is totally uninteresting compared to this stuff. They’re also free of the trusted initialization challenges zerocash has.”
Furthermore, users, traders and developers were concerned that the ZCash development team takes a founder’s reward for the first four years since the development, which is equivalent to 10 percent of mining income. For the first 50 ZEC however, the development team took 20 percent of mining income share.
“At first, 50 ZEC will be created every ten minutes. 80 percent of the newly created ZEC will go to the miners, and 20 percent ZEC to the founders. Every four years, the rate of ZEC being created will halve (again, just like in Bitcoin). After the first four years the ZEC created per ten minutes will drop to 25 ZEC, but after the first four years, 100 percent of it goes to the miners,” the ZCash team stated.
Because of these controversial aspects of ZCash, a significant portion of the community praised the development team and roadmap of Monero, which has lived up to the standards of DarkNet marketplaces, Monero users and investors.
This comparison between ZCash and Monero ultimately benefited the users of Monero, as its value continued to increase and recover from its previous downfall in early October, when DarkNet users struggled to withdraw funds due to technical problems on the side of the darknet marketplace.
Not only has Monero recovered from its initial drop in value but reached a new stability point at around $6.50, recording a 140 percent weekly increase in price.
NY Times also featured Monero recently, emphasizing that while DarkNet marketplaces are hesitant towards the integration of ZCash, they have already started to implement Monero as their core component.
“Another relatively new virtual currency, Monero, came with anonymity built into the system. Earlier this year it was seized upon by speculators who pushed up the value of Monero significantly before the price fell back down. Unlike Zcash, Monero can already be used for purchases on black market websites,” read the article.